A rift appears to have emerged in Israel's ruling Likud party - just a day after Binyamin Netanyahu was sworn in as foreign minister.

Mr Netanyahu and Prime Minister Ariel Sharon failed to agree on a date for the Likud primaries. The new foreign minister accused Mr Sharon of trying to hold the election earlier to undermine Mr Netanyahu's chances.

I am running for the Likud leadership because the country is in dire straits and we have to get it out

Benjamin Netanyahu, Foreign Minister

Mr Netanyahu was also highly critical of Mr Sharon's handling of the economy and national security.

The hawkish former prime minister plans to challenge Mr Sharon for control of the right-wing party and reclaim the prime minister's office in Israel's coming election.

"I am running for the Likud leadership because the country is in dire straits and we have to get it out," Mr Netanyahu, 53, told The Jerusalem Post in an interview published on Thursday.

Asked whether he thought the country was worse off after nearly two years of Mr Sharon's leadership, Netanyahu said: "I think one of the things that we see is the
tremendous escalation of (Palestinian) terror.

"The economy is in worse shape... A lot of that is derived
not so much from the lack of security but from the absence of a
coherent economic policy."

The remarks were seen as an indicator that security and the economy would be the main themes of Mr Netanyahu's campaign.

'Exile Arafat'

Mr Netanyahu also said a US war against Iraq would create the perfect opportunity to send Palestinian leader Yasser Arafat into exile.

"I think it is easy to persuade the international community of what the majority of Israelis understand: namely, that Arafat is not a partner," he said.

Asked about Palestinian statehood, he said: "I think we have to resist and I think we can and must resist the Palestinians' efforts to achieve powers that would endanger the state of Israel, like the fielding of an army."

Sharon hoped Netanyahu would defend Israel abroad

The Israeli prime minister has failed to halt a wave of suicide bombings in the region over the last two years.

Mr Sharon brought Mr Netanyahu into his team hoping to curb his rival's criticism of him ahead of the Likud primary and give Israel an eloquent defender abroad of Israel's hard line on a Palestinian uprising for statehood.

Opinion polls indicate that Likud will win the election, which is expected to
take place in January.

The prime minister called it this week after the centre-left Labour Party abandoned his coalition following a row over funds for Jewish settlements.